Which of the following influence the slope of the policy frontier?
A) How effective fiscal policy is in manipulating actual GDP in the short run without generating price and wage effects
B) The degree to which adjustments in fiscal policy designed to manipulate actual GDP in the short run are reflected in changes in prices and wages
C) How effective monetary policy is in manipulating actual GDP in the short run without price and wage effects
D) The degree to which adjustments in monetary policy designed to manipulate actual GDP in the short run are reflected in changes in prices and wages
E) Any, and perhaps all, of the above depending on circumstances

Question

Quizplus · Accepted Answer

The slope of the policy frontier can be influenced by the effectiveness of both fiscal and monetary policies in manipulating actual GDP in the short run, as well as how adjustments in these policies are reflected in changes in prices and wages. Therefore, any or all of the given options could influence the slope of the policy frontier depending on specific circumstances.

Which of the Following Influence the Slope of the Policy